UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

/ /  TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT



                        Commission File Number: 00-19813

                               InfoNow Corporation
                               -------------------
        (Exact name of small business issuer as specified in its charter)


             Delaware                             04-3083360
             --------                             ----------
     (State of Incorporation)         (I.R.S. Employer Identification No.)

            1875 Lawrence Street, Suite 1100, Denver, Colorado, 80202
            ---------------------------------------------------------
                    (Address of principal executive offices)

                                  303-293-0212
                                  ------------
                           (Issuer's telephone number)

Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                                 Yes [X] No [ ]

As of August 11, 2005, there were 10,055,398 shares of the Issuer's common stock
outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

<PAGE>

                               INFONOW CORPORATION

                                      INDEX
                                      -----

                                                                        Page No.
                                                                        --------
                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         Unaudited Balance Sheet - June 30, 2005...............................3

         Unaudited Statements of Operations - For the Three and Six Months
           Ended June 30, 2005 and June 30, 2004...............................4

         Unaudited Statements of Cash Flows - For the Six Months
           Ended June 30, 2005 and June 30, 2004...............................5

         Notes to Unaudited Financial Statements...............................6


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............13

ITEM 3.  CONTROLS AND PROCEDURES..............................................30


                           PART II. OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS................31

ITEM 6.  EXHIBITS.............................................................31

         SIGNATURES...........................................................32







                                        2
<PAGE>
<TABLE>
<CAPTION>

                                 PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

                                      INFONOW CORPORATION
                                         BALANCE SHEET
                           (In Thousands, Except Share Information)
                                          (Unaudited)

                                                                                        JUNE 30,
                                                                                          2005
                                                                                        --------
                                            ASSETS
                                            ------
CURRENT ASSETS:
<S>                                                                                     <C>
    Cash and cash equivalents                                                           $  3,363
    Accounts receivable:
          Billed, net of allowance of $25                                                    898
          Unbilled                                                                           307
    Prepaid expenses and other current assets                                                408
                                                                                        --------
         Total current assets                                                              4,976
                                                                                        --------

PROPERTY AND EQUIPMENT, net                                                                  349

OTHER ASSETS AND DEFERRED CHARGES                                                             37
                                                                                        --------

TOTAL ASSETS                                                                            $  5,362
                                                                                        ========

                             LIABILITIES AND STOCKHOLDERS' EQUITY
                             ------------------------------------
CURRENT LIABILITIES:
    Capital leases                                                                      $     19
    Accounts payable                                                                         492
    Payroll related liabilities                                                              560
    Other liabilities                                                                         32
    Short-term deferred revenues                                                           1,530
                                                                                        --------
         Total current liabilities                                                         2,633

    Long-term deferred revenues                                                               70
    Deferred rent                                                                            104

COMMITMENTS AND CONTINGENCIES (Note 2)

STOCKHOLDERS' EQUITY:
    Preferred stock, $.001 par value; 1,712,335 shares authorized
       Series A Convertible, 213,483 shares authorized, none issued and outstanding         --
       Series B Convertible Participating Preferred Stock, 550,000 shares authorized,
         none issued and outstanding                                                        --
    Common stock, $.001 par value; 40,000,000 shares authorized; 10,055,398 issued
         and outstanding                                                                      10
    Additional paid-in capital                                                            40,146
    Accumulated deficit                                                                  (37,601)
                                                                                        --------
         Total stockholders' equity                                                        2,555
                                                                                        --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                              $  5,362
                                                                                        ========


                       See notes to the unaudited financial statements.

                                               3
<PAGE>

                                     INFONOW CORPORATION
                                  STATEMENTS OF OPERATIONS
                        (In Thousands, Except Per Share Information)
                                         (Unaudited)



                                           Three Months Ended June 30,   Six Months Ended June 30,
                                           ---------------------------   -------------------------
                                                2005        2004             2005        2004
                                              --------    --------         --------    --------
REVENUES:
    Service and other fees                    $  1,729    $  2,422         $  3,477    $  4,735
    Implementation fees                            437         379              938         947
    Software license fees                            4          21               27         139
                                              --------    --------         --------    --------
        Total revenues                           2,170       2,822            4,442       5,821
                                              --------    --------         --------    --------

COST OF REVENUES                                 1,263       1,368            2,996       2,683
                                              --------    --------         --------    --------

GROSS MARGIN                                       907       1,454            1,446       3,138

OPERATING EXPENSES:

    Selling and marketing                          232         538              635       1,125
    Product development                            176         186              375         444
    General and administrative                     539         636            1,598       1,363
                                              --------    --------         --------    --------
        Total operating expenses                   947       1,360            2,608       2,932
                                              --------    --------         --------    --------

INCOME (LOSS) FROM OPERATIONS                      (40)         94           (1,162)        206

OTHER INCOME (EXPENSE):
    Interest income                                 18           6               33          11
    Interest expense                                (1)         (2)              (3)         (5)
                                              --------    --------         --------    --------
        Total other income                          17           4               30           6
                                              --------    --------         --------    --------

NET INCOME (LOSS)                             $    (23)   $     98         $ (1,132)   $    212
                                              ========    ========         ========    ========

NET INCOME (LOSS) PER COMMON SHARE:
    Basic                                     $   --      $    .01         $   (.11)   $    .02
    Fully diluted                             $   --      $    .01         $   (.11)   $    .02
                                              ========    ========         ========    ========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
    Basic                                       10,055       9,914           10,054       9,866
    Fully diluted                               10,055      10,975           10,054      11,209
                                              ========    ========         ========    ========


                      See notes to the unaudited financial statements.

                                              4
<PAGE>

                                 INFONOW CORPORATION
                              STATEMENTS OF CASH FLOWS
                                   (in Thousands)
                                     (Unaudited)

                                                               SIX MONTHS ENDED JUNE 30,
                                                                   2005        2004
                                                                  -------    -------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                             $(1,132)   $   212
    Adjustments to reconcile net income to net cash provided by
         operating activities:
         Depreciation and amortization                                162        219
         Loss on asset disposition                                      1       --
         Allowance for bad debt                                       (10)        12
         Changes in operating assets and liabilities:
             Accounts receivable                                      231        169
             Other current assets                                      70         64
             Other assets and deferred charges                        (11)         1
             Accounts payable                                         136        149
             Payroll related and other liabilities                     21        (55)
             Deferred revenue                                         210       (110)
                                                                  -------    -------
         Net cash provided by (used in) operating activities         (322)       661

CASH FLOWS FROM INVESTING ACTIVITIES:

    Purchase of property and equipment                                (52)      (157)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from exercise of stock options                            10        447
    Principal payments on debt obligations                            (37)       (34)
                                                                  -------    -------
         Net cash provided by (used in) financing activities          (27)       413

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 (401)       917

CASH AND CASH EQUIVALENTS, beginning of period                      3,764      3,299
                                                                  -------    -------

CASH AND CASH EQUIVALENTS, end of period                          $ 3,363    $ 4,216
                                                                  =======    =======

SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest                                        $     3    $     5
                                                                  =======    =======


                  See notes to the unaudited financial statements.

                                         5
</TABLE>
<PAGE>

                               INFONOW CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
     ------------------------------------------------------------

     Organization and Business Activity - Unless otherwise indicated, all
     references in this Form 10-QSB to "InfoNow" or the "Company" refer to
     InfoNow Corporation. The Company was incorporated under the laws of the
     State of Delaware on October 29, 1990. The Company provides channel
     visibility and channel management solutions, in the form of software and
     services, to companies that sell their products through complex networks of
     distributors, dealers, resellers, retailers, agents or branches (i.e.,
     "channel partners"). Companies use InfoNow's software and services to
     collaborate with their channel partners to create demand, increase
     revenues, lower operating costs, calculate sales commissions, and maximize
     the return on investment of their channel strategies.

     The accompanying interim condensed financial statements are unaudited but,
     in the opinion of management, reflect all adjustments (consisting of those
     of a normal recurring nature) necessary in order to make the financial
     statements not misleading. The results of operations for any interim period
     are not necessarily indicative of results for the full year. These
     condensed financial statements should be read in conjunction with the
     financial statements and notes thereto contained in the Company's previous
     filings with the U.S. Securities and Exchange Commission.

     Use of Estimates - The preparation of financial statements in conformity
     with accounting principles generally accepted in the United States of
     America requires management to make estimates and assumptions that affect
     the reported amounts of assets and liabilities and disclosure of contingent
     assets and liabilities at the date of the financial statements and the
     reported amounts of revenues and expenses during the reporting period.
     Actual results could differ from those estimates and the differences could
     be material. Significant estimates include the estimate of a client life,
     over which deferred revenue and implementation expenses are recognized; the
     percentage of completion on client contracts; the percentage of hours that
     technical staff devote to activities related to the cost of revenues versus
     product development activities, which drives the allocation of related
     costs; and the allowance for doubtful accounts.

     Cash and Cash Equivalents - The Company considers all highly liquid
     investments with original maturity dates of three months or less to be cash
     equivalents. The Company's excess cash is maintained in a money market
     fund.

     Property and Equipment - Property and equipment are stated at cost.
     Replacements, renewals and improvements are capitalized and costs for
     repairs and maintenance are expensed as incurred. Depreciation is computed
     using the straight-line method over estimated useful lives of three to five
     years.

     Revenue Recognition - The Company offers its software and services to
     clients in two forms. The first method utilizes an application service
     provider, or ASP, model. Under this business model, the Company sells the

                                       6
<PAGE>

     right to use its software for the term of a specific agreement, and it
     implements and hosts that solution to meet specific client requirements.
     Accordingly, the Company charges the client an implementation fee, a
     managed service fee and, in many cases, variable monthly fees. The
     implementation fee and related direct costs are deferred and recognized
     ratably over the longer of the expected client life or contract term.
     Managed service fees and variable monthly fees are recognized as services
     are performed.

     The second method of delivering software and services is via a
     license-hosted model. Under this model, the Company sells its clients a
     perpetual license for its software. The client can install the software on
     their own in-house systems, or, as is most often the case, the Company will
     host the software and perform related services under a managed services
     agreement.

     Sales of solutions under the license-hosted model typically include a
     software license fee, an implementation fee, a software maintenance fee, a
     managed service fee and, in many cases, variable monthly fees. The Company
     establishes vendor specific objective evidence, or VSOE, of fair value for
     the software maintenance fee and managed service fee elements of a contract
     based on the following two considerations: 1) they are sold independently
     of the other elements in a contract, and independently of each other; and
     2) these services generally are, and have historically been, renewed in
     subsequent years (independent of the other elements) at the same fees
     charged when all elements are sold together. Therefore, the VSOE of fair
     value for each of such services can be properly determined by reference to
     the applicable clients' contractual fee rates relating to those services.

     The Company is not, however, currently able to establish VSOE of fair value
     for the software license and implementation fee elements of its contracts.
     Therefore, it uses the residual value method to recognize revenue in
     accordance with Statement of Position 97-2, Software Revenue Recognition
     ("SOP 97-2"). Using this method, revenue from the managed service and
     software maintenance elements of a contract is recognized ratably over the
     term of the managed service arrangement and the software maintenance
     arrangement, respectively. Since the Company is currently unable to
     establish VSOE of fair value for the software license fee and
     implementation fee components of a contract and the installation services
     are essential to the functionality of the software, the Company applies
     contract accounting to both the software license and implementation
     elements of the arrangement in accordance with Accounting Research Bulletin
     No. 45, Long-Term Construction-Type Contracts ("ARB 45") and Statement of
     Position 81-1, Accounting for Performance of Construction-Type and Certain
     Production-Type Contracts ("SOP 81-1"). Accordingly, license and
     implementation revenues are recognized on a percentage of completion basis.
     As changes occur in the estimate of completion percentage, revenue
     recognition is adjusted accordingly. The estimate of completion percentage
     is based on the ratio of the actual effort spent on a project as of the
     financial statement date to the estimate of total effort to complete the
     implementation. Losses are recognized immediately if projected direct
     implementation costs exceed anticipated implementation revenues. Revenue
     from variable monthly fees is recognized as services are performed.

                                       7
<PAGE>

     The Company has historically sold its solutions primarily through direct
     sales efforts; however, when the Company sells solutions through a reseller
     channel it recognizes revenue consistent with the methods described above.

     Income Taxes - The Company accounts for its income tax assets and
     liabilities in accordance with SFAS No. 109, Accounting for Income Taxes
     ("SFAS No. 109"). SFAS No. 109 requires recognition of deferred tax assets
     and liabilities for the expected future income tax consequences of
     transactions. Under this method, deferred tax assets and liabilities are
     determined based on the difference between the financial statement and tax
     basis of assets and liabilities using enacted tax rates in effect for the
     year in which the differences are expected to reverse. Net deferred tax
     assets are then reduced by a valuation allowance for amounts that do not
     satisfy the realization criteria of SFAS No. 109. As a result of the
     valuation allowance, the Company had no net deferred tax assets at June 30,
     2005.

     Stock Compensation Expense - The Company records its stock compensation
     expense in accordance with SFAS No. 123, Accounting for Stock-Based
     Compensation ("SFAS No. 123"). SFAS No. 123 specifies a fair value based
     method to measure compensation cost of issued stock options and similar
     instruments issued using a Black-Scholes model or other comparable method.
     However, the Company has elected an option under SFAS No. 123 that allows a
     company to continue to recognize compensation cost for employees and
     directors in accordance with the guidance in Accounting Principles Board
     No. 25 and disclose the pro forma results of operations as if SFAS No. 123
     had been applied to the financial statements. Transactions in which the
     Company issues stock options or other equity instruments to acquire goods
     or services from non-employees are accounted for in accordance with SFAS
     No. 123. The Company accounts for stock compensation for employees via the
     intrinsic value method and for non-employees via the fair value method. The
     intrinsic value method results in no compensation expense for new stock
     option grants because the market value and strike price of the stock option
     grant are the same on the grant date. Had compensation cost for the
     Company's plans been determined consistent with SFAS No. 123, the Company's
     net loss and loss per share would have been increased to the pro forma
     amounts indicated below:

                                                   Three Months Ended June 30,
                                                         2005       2004
                                                       -------    -------
                                                     (In thousands, except
                                                       per share amounts)
      Net Income (Loss)
         As reported                                   $   (23)   $    98
         Add: Stock-based employee compensation
           expense included in reported net
           income, net of tax effect of $0                --         --
         Deduct: Total stock-based employee
           compensation expense determined under
           fair value based method for all
           awards, net of tax effect of $0                 (34)      (848)
                                                       -------    -------
         Pro forma                                     $   (57)   $  (750)
                                                       =======    =======

      Earnings (loss) per share:
           Basic and diluted-as reported               $  --      $   .01
           Basic and diluted-pro forma                 $  (.01)   $  (.08)


                                       8
<PAGE>

                                                    Six Months Ended June 30,
                                                         2005       2004
                                                       -------    -------
                                                     (In thousands, except
                                                       per share amounts)
      Net Income (Loss)
         As reported                                   $(1,132)   $   212
         Add: Stock-based employee compensation
           expense included in reported net
           income, net of tax effect of $0                --         --
         Deduct: Total stock-based employee
           compensation expense determined under
           fair value based method for all
           awards, net of tax effect of $0                (326)    (1,190)
                                                       -------    -------
         Pro forma                                     $(1,458)   $  (978)
                                                       =======    =======

      Earnings (loss) per share:
           Basic and diluted-as reported               $  (.11)   $   .02
           Basic and diluted-pro forma                 $  (.15)   $  (.10)


     In December 2004, the FASB issued SFAS No. 123(R), Share Based Payment,
     that requires companies filing as small business issuers to expense the
     value of employee stock options and similar awards for interim and annual
     periods beginning after December 15, 2005 and applies to all outstanding
     and unvested stock-based awards at a company's adoption date. Accordingly,
     beginning in 2006, the expense related to all stock compensation will be
     included in the Company's results of operations.

     During the six months ended June 30, 2005, the Company received $10,000 of
     proceeds from the exercise of 10,667 options by employees and former
     employees pursuant to the terms of the original options. During the six
     months ended June 30, 2004, the Company received $447,000 of proceeds from
     the exercise of 318,871 options by employees and former employees.

     Net Income Per Common Share - Earnings per share is presented in accordance
     with the provisions of SFAS No. 128, Earnings Per Share. Basic earnings per
     share, or EPS, is calculated by dividing the income or loss available to
     common stockholders by the weighted average number of common shares
     outstanding for the period. Diluted EPS reflects the potential dilution
     that could occur if securities or other contracts to issue common stock
     were exercised or converted into common stock. Stock options, warrants
     outstanding and their equivalents are included in diluted earnings per
     share computations through the "treasury stock method" unless they are
     antidilutive.

                                        9
<PAGE>

     The components of basic and diluted earnings per share were as follows:


                                                   Three Months Ended June 30,
                                                        2005        2004
                                                      --------    --------
                                                     (In thousands, except
                                                       per share amounts)
     Net income (loss) available for common
        shareholders (A)                              $    (23)   $     98
                                                      --------    --------
     Weighted average common shares outstanding (B)     10,055       9,914
     Dilutive effect of employee stock based
        compensation                                      --         1,061
                                                      --------    --------
     Common stock and common stock equivalents (C)      10,055      10,975
                                                      ========    ========

     Earnings (loss) per share:
     Basic (A/B)                                      $   --      $    .01
     Diluted (A/C)                                    $   --      $    .01


                                                    Six Months Ended June 30,
                                                        2005        2004
                                                      --------    --------
                                                     (In thousands, except
                                                       per share amounts)
     Net income (loss) available for common
        shareholders (A)                              $ (1,132)   $    212
                                                      --------    --------
     Weighted average common shares outstanding (B)     10,054       9,866
     Dilutive effect of employee stock based
        compensation                                      --         1,343
                                                      --------    --------
     Common stock and common stock equivalents (C)      10,054      11,209
                                                      ========    ========

     Earnings (loss) per share:
     Basic (A/B)                                      $   (.11)   $    .02
     Diluted (A/C)                                    $   (.11)   $    .02


     As of June 30, 2005, options to purchase 5,519,032 shares of common stock
     were outstanding, but were not included in the computation of loss per
     share for the three or six months ended June 30, 2005 because their effect
     would have been antidilutive. For the three and six months ended June 30,
     2004, options to purchase 2,260,000 and 1,668,000 shares, respectively, of
     common stock were outstanding, but were not included in the computation of
     diluted EPS because the options' exercise price was greater than the
     average market price of the common shares.

                                       10
<PAGE>

     Concentrations of Credit Risk - Financial instruments which potentially
     subject the Company to concentrations of credit risk are cash equivalents
     and accounts receivable. The Company attempts to limit its credit risk
     associated with cash equivalents by placing the Company's financial
     instruments with a major institution. A majority of the Company's cash and
     cash equivalents balance at June 30, 2005 was in excess of federally
     insured limits. The Company's clients are primarily large multi-national
     entities located throughout the U.S. The Company grants credit, generally
     without collateral, to these clients under specific contractual terms. The
     Company has not experienced any material losses related to its accounts
     receivable to date, however, there can be no assurance that it will not
     experience material losses in the future.

     During the three and six months ended June 30, 2005, the Company earned
     $866,000, or 40%, and $1,728,000, or 39%, respectively, of its revenue from
     its largest client. During the three and six months ended June 30, 2005,
     this revenue consisted of $603,000 and $1,179,000, respectively, from
     channel visibility solutions and $263,000 and $549,000, respectively, from
     channel management solutions. One other organization accounted for more
     than 10% of the Company's revenue during the three and six months ended
     June 30, 2005. This client represented $326,000, or 15%, and $511,000, or
     12%, respectively, of the Company's total revenue during the three and six
     months ended June 30, 2005. As of June 30, 2005, the Company's largest
     client accounted for approximately 43%, or $383,000, of the Company's net
     accounts receivable balance. The loss of this client, further reduction in
     revenues from this client, or its inability or failure to pay would have a
     material adverse impact on the Company's financial condition and results of
     operations. Two other clients individually accounted for more than 10% of
     the Company's net accounts receivable at June 30, 2005. These clients
     represented $288,000, or 32%, and $96,000, or 11%, respectively, of the
     Company's net accounts receivable balance at June 30, 2005. No other
     clients accounted for more than 10% of the Company's accounts receivable
     balance at June 30, 2005.

     During the three and six months ended June 30, 2004, the Company earned
     $1,470,000, or 52%, and $2,989,000, or 51%, respectively, of its revenue
     from its largest client. During the three and six months ended June 30,
     2004, this revenue consisted of $1,122,000 and $2,234,000, respectively,
     from Channel Insight solutions and $348,000 and $755,000, respectively,
     from Channel Management solutions. No other organization accounted for more
     than 10% of the Company's revenue during the three or six months ended June
     30, 2004.

     As of June 30, 2005, approximately $148,000, or 25%, of the Company's total
     monthly contracted managed service fees of $589,000 was tied to Channel
     Insight contracts with its largest client. These managed service fees
     expire in October 2005. The Company is working with this client to
     negotiate an extension to the contract associated with this solution at a
     reduced monthly rate. In addition, the Company continues to work with this
     client for purposes of selling new solutions; however, there can be no
     assurance that it will be successful in renewing, extending or expanding
     solutions for this client.

     Segment Information - The Company operates in a single reportable segment
     and all revenues from clients are primarily from the sale of the Company's
     channel visibility and channel management software and services. The
     Company sells its solutions and services domestically to clients that, in
     some cases, have an international presence. All solutions and services are
     delivered from the Company's Denver, Colorado, office and two data centers
     located in Denver and Thornton, Colorado.

                                       11
<PAGE>

     Recent Accounting Pronouncements - In December 2004, the FASB issued SFAS
     No. 123(R), Share Based Payment, that requires companies filing as small
     business issuers to expense the value of employee stock options and similar
     awards for interim and annual periods beginning on or after December 15,
     2005 and applies to all outstanding and unvested stock-based awards at a
     company's adoption date. The Company believes that the adoption of this
     standard could have a material impact on its financial position and results
     of operations since the Company expects to continue to utilize stock-based
     compensation to motivate employees in the future, and, as a result, the
     Company expects that the implementation of SFAS No. 123(R) will result in
     increased compensation expense in future years.

     In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary
     Assets, which eliminates the exception for nonmonetary exchanges of similar
     productive assets and replaces it with a general exception for exchanges of
     nonmonetary assets that do not have commercial substance. SFAS No. 153 will
     be effective for nonmonetary asset exchanges occurring in fiscal periods
     beginning after June 15, 2005. The Company does not believe the adoption of
     this standard will have a material impact on its financial position or
     results of operations.

     In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
     Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3.
     The Statement changes the requirements for the accounting for, and
     reporting of, a change in accounting principle. This Statement applies to
     all voluntary changes in accounting principle. It also applies to changes
     required by an accounting pronouncement in the unusual instance that the
     pronouncement does not include specific transition provisions. When a
     pronouncement includes specific transition provisions, those provisions
     should be followed. This Statement requires retrospective application to
     prior periods' financial statements for changes in accounting principle,
     unless it is impractical to determine either the period-specific effects or
     the cumulative effect of the change. When it is impractical to determine
     the period-specific effect of an accounting change on one or more
     individual prior periods presented, this Statement requires that the new
     accounting principle be applied to the balances of assets and liabilities
     as of the beginning of the earliest period for which retrospective
     application is practical and that a corresponding adjustment be made to the
     opening balance of retained earnings for that period rather than being
     reported as a component of income. When it is impractical to determine the
     cumulative effect of applying a change in accounting principle to all prior
     periods, this Statement requires that the new accounting principle be
     applied as if it were adopted prospectively from the earliest date
     practical. This Statement is effective for business enterprises and
     not-for-profit organizations for accounting changes and corrections of
     errors made in fiscal years beginning after December 31, 2005. The Company
     does not believe the adoption of this standard will have a material impact
     on its financial position or results of operations.

                                       12
<PAGE>

2.   COMMITMENTS AND CONTINGENCIES
     -----------------------------

     The Company leases approximately 27,000 square feet of office space at a
     rate of $17.00 per square foot through September 2005. The rate increases
     to $18.00 per square foot from October 2005 through September 2007, when
     the lease expires. The lease contains a refurbishment allowance of
     $326,000, of which the Company utilized approximately $35,000 to improve
     the premises and $291,000 to offset a portion of its rent obligations from
     September 2002 through May 2003. Rent expense, net of the refurbishment
     allowance, is recognized on a straight-line basis over the term of the
     lease. The difference between cash payments for rent and the straight-line
     rent expense is recorded as deferred rent on the Company's balance sheet.

     From time to time the Company may be involved in litigation that arises in
     the normal course of business operations. As of the date of this report,
     the Company is not a party to any litigation that it believes could
     reasonably be expected to have a material adverse effect on its business or
     results of operations.

     The Company has contracts with certain of its clients that contain
     indemnification clauses, which could require the Company to make payments
     to the client if it is determined that the solution provided under the
     contract infringes any proprietary right of a third party, and such
     infringement cannot be resolved by the Company. The Company does not
     believe there are currently any outstanding obligations related to
     indemnification clauses and, accordingly, there is no liability reflected
     in the accompanying balance sheet for these contingencies.

Item 2. Management's Discussion and Analysis or Plan of Operation.

The following discussion and analysis of the financial condition and results of
operations for InfoNow should be read in conjunction with our unaudited
financial statements and related notes appearing elsewhere in this report. This
discussion contains statements that are not historical fact. These
forward-looking statements are based on our current expectations, assumptions,
estimates and projections about our industry and business and include statements
about markets for our software and services, planned development of products and
anticipated expense and revenue levels. These forward-looking statements contain
words such as "anticipate", "believe", "plan", "expect", "should" or similar
language. These forward-looking statements are subject to business and economic
risks. Our actual results could differ materially from those anticipated in such
forward-looking statements as a result of many factors, including those set
forth in this discussion and in other documents we have filed with the
Securities and Exchange Commission.

General Information and Overview

InfoNow provides channel visibility and channel management solutions, in the
form of software and services, to companies that sell their products through
complex networks of distributors, dealers, resellers, retailers, agents or
branches (i.e., "channel partners"). Companies use our software and services to
collaborate with their channel partners to create demand, increase revenues,
lower operating costs and maximize the return on investment of their channel
strategies. Our clients are generally companies with extensive channel partner

                                       13
<PAGE>

networks, and include companies such as Apple, ATI Technologies, Bank of
America, Enterasys Networks, Hewlett-Packard, Kingston, SMC Networks, The
Hartford, Visa, and Wachovia Corporation. For a more comprehensive discussion of
our channel visibility and channel management solutions, please refer to the
section entitled "InfoNow's Software and Services" in our Annual Report filed
with the Securities and Exchange Commission on Form 10-KSB for the year ended
December 31, 2004.

As of June 30, 2005, we had 45 managed services clients, compared to the 42 we
reported as of June 30, 2004. The increase in our client base is primarily
attributable to sales of our Channel Insight solution. Despite the increase in
our client base, our contracted managed service fees, which includes fees that
are currently in a month-to-month contract status, decreased from $814,000 per
month as of June 30, 2004, to $589,000 per month as of June 30, 2005. The
decrease was primarily attributable to a $222,000 per month reduction in service
fees related to the Channel Insight contract with our largest client, as well as
reductions associated with other client contract renegotiations and
terminations, which were only partially offset by increases in our contracted
managed service fees related to new clients. Further discussion related to the
Channel Insight contract with our largest client can be found in Results of
Operations and Related Business Risks and Assumptions.

We have experienced extended sales cycles in recent years, which we believe were
caused primarily by the following factors: i) there has been a general decline
in information technology, or IT, spending in recent years and our past efforts
to sell enterprise-level solutions, which typically require a significant
financial commitment on the part of the client, were inconsistent with this
trend; ii) the market for Channel Insight solutions is at an early stage of
adoption; iii) in many instances, our sales prospects have not budgeted for the
solutions we provide and, therefore, require a lengthy evaluation process prior
to purchasing; iv) we have not yet implemented our Channel Insight solution for
enough clients to enable us to gain significant sales leverage from client
references; and v) we are susceptible to competitive threats such as clients or
prospective clients outsourcing certain IT functions to other countries or
attempting to implement in-house solutions similar to those that we provide in
an effort to reduce costs.

As a result of these factors, it is difficult for us to accurately predict the
demand for our solutions, as well as the value we will receive upon selling
them. In addition, our implementation cycles have, in some cases, extended
substantially beyond our initial estimates, which has delayed our ability to
recognize license, implementation and service fee revenue in certain periods. As
a result of these challenges, among other things, our revenues can fluctuate
substantially from quarter to quarter.

In an effort to accelerate the sales cycle for Channel Insight we have developed
a modular delivery model for this solution, wherein a prospective client can
access distinct modules related to specific business needs at lower introductory
price points, and add other applications incrementally. Furthermore, during the
fourth quarter of 2004, we launched a limited Channel Insight offering targeted
at mid-market companies. Additionally, we are working on building leveraged
access to clients through strategic partner relationships. As a result of many
of these initiatives, as well as other ongoing sales efforts, we signed five
Channel Insight agreements with new customers in 2004 and three Channel Insight
agreements with new customers thus far in 2005 through the date of this report.
In addition, we experienced an increase in sales (based on the first-year value
of contracts signed) in the first half of 2005 relative to the first half of
2004.

                                       14
<PAGE>

Personnel-related costs, which include salaries, vacation, fringe benefits,
payroll taxes and personnel support costs such as office supplies for employees,
comprised approximately 80% and 79% of our total costs in the second quarter of
2005 and 2004, respectively. Because salaries and related costs are such a
significant portion of our overall costs, variation in the need for technical
personnel based on the demand for our solutions, as well as fluctuations in the
cost of attracting and retaining qualified technical personnel, can
significantly impact our operating results.

During the second half of this year we plan to develop a software-as-a-service
Channel Insight offering, which should be available in early 2006. The new
service is expected to accelerate market penetration of Channel Insight by
making it easier to deploy and available to a broader set of potential clients.
In addition, we expect that with the software-as-a-service Channel Insight
offering we will realize implementation efficiencies and related cost savings on
a per-deal basis after deployment. We expect to add headcount during the second
half of 2005 to support the development of this offering and anticipate that
this hiring will increase our costs more quickly than our revenues in the
near-term.

On February 25, 2005, we completed a workforce reduction. We eliminated four
full-time positions to more effectively align our cost structure with a
previously announced reduction in monthly service fees from our largest client,
among other factors. In addition, we temporarily reassigned the majority of our
product development employees to focus on client implementations and process
improvements. Employees whose employment was terminated received one-time
severance benefits, including salary, accrued vacation and health care benefits.
As a result, the Company paid out approximately $36,000 in cash and recognized a
related pre-tax charge of approximately $26,000 in the first quarter of 2005. In
addition, to further motivate our staff since we anticipate that they will be
required to take on incremental responsibilities as a result of the workforce
reduction, as well as recent attrition in our staff, on March 25, 2005 we
awarded a total of 352,100 stock options to our employees, which vested
immediately.

On March 4, 2005, Michael W. Johnson resigned as our Chief Executive Officer,
President and Chairman of our Board of Directors after having served as such and
in other capacities since October 1995. Mr. Johnson, who beneficially owned
approximately 15.2% of our common stock as of March 14, 2005 (assuming his
exercise in full of his then outstanding vested options and warrants), will
remain on our Board of Directors. In connection with Mr. Johnson's resignation
we recognized approximately $330,000 in severance expense in the first quarter
of 2005, of which approximately $85,000 has been paid during the first half of
2005. We expect to pay the remaining $245,000 over the period from July 2005
through October 2005. A current director, Jeffrey Peotter, has been elected
Chairman of our Board of Directors. On March 7, 2005, we amended Harold R.
Herbst's employment agreement to provide for his employment as our interim Chief
Executive Officer for a six-month period commencing on March 4, 2005. Except to
the extent necessary to reflect Mr. Herbst's appointment for six months as our
interim Chief Executive Officer, we did not amend the material terms of Mr.
Herbst's employment agreement, which terms are disclosed in our proxy statement
filed with the SEC in connection with the 2005 annual meeting of stockholders
under the caption "Employment Contracts, Termination of Employment and
Change-In-Control Arrangements" and are incorporated herein by reference. On
March 25, 2005, we also issued Mr. Herbst options to purchase 150,000 shares of
our common stock.

                                       15
<PAGE>

Critical Accounting Policies

We believe the following accounting policies, which are important to our
financial position and results of operations, require significant judgments and
estimates on the part of management. We believe that the following description
represents our critical accounting policies and estimates used in the
preparation of our financial statements, although it is not all-inclusive.

Revenue Recognition
-------------------

Our solutions are typically sold with annual or multi-year contracts. The
initial term of these agreements range from one to three years and the
agreements are typically renewable upon mutual agreement of InfoNow and the
client. We also provide services to a number of clients under work-order or
purchase-order arrangements.

A typical contract fee could include the following six separate
revenue-producing components:

Software license and implementation fees:

     -    The software license fee applies to all configured application
          software and related functionality used in the client's application.
     -    The implementation fee applies to the configuration of a tailored,
          client-specific software interface to the system and the design and
          configuration of client business rules and databases.

Managed service fees and software maintenance fees:

     -    The managed service fee applies to hosting and provision of the
          service, any reconfiguration or maintenance on the software necessary
          during the contract term, as well as performance of routine
          maintenance to client databases and core systems.
     -    The variable monthly fee includes charges for system usage in excess
          of contractual thresholds.
     -    A software maintenance fee (for clients utilizing a licensed model)
          includes updates to the client's software.

Other fees:

     -    Variable fees included under this heading are pass-through charges for
          voice recordings, faxes, geocoding, and telecommunications charges,
          which are typically billed with an incremental administrative fee in
          addition to the direct charge we incur to provide these services.

We offer our solutions to clients in two forms. The first method utilizes an
application service provider, or ASP, model. Under this business model, we sell
the right to use our software for the term of a specific agreement, and we
implement and host that solution to meet specific client requirements.
Accordingly, we charge the client an implementation fee, a managed service fee
and, in many cases, variable monthly fees. The implementation fee and related
direct costs are deferred and recognized ratably over the longer of the expected
client life or contract term in accordance with SAB 104. Because most of our
initial sales contracts range from one to three years in duration, the client
life is typically the longer deferral period and is estimated to be three years.

                                       16
<PAGE>

This estimate is based on a number of factors, including client turnover and the
rate of change for the technology underlying our solutions. We evaluate the
estimate of a client life on an ongoing basis in consideration of these factors
and the estimate of three years has remained constant since the adoption of SAB
104. If, based upon our evaluations, the estimate of a client life were to
increase, deferred revenue balances would be recognized over a longer time
period. A reduction in the estimate of a client life would, conversely, result
in accelerated recognition of deferred revenues relative to prior years. Because
our deferred revenues balances have declined as a result of our selling more
licensed solutions, this estimate has decreased in significance relative to
prior years. We expect to continue selling primarily licensed solutions;
therefore, we anticipate that the estimate of a client life will continue to
decrease in significance in future periods. Revenue from managed service fees
and variable monthly fees is recognized as services are performed.

The second method of delivering our software and services is via a
license-hosted model. Under this model, we grant our clients a perpetual license
for our software. They can install our software on their own in-house systems,
utilize third-party service providers for hosting, or, as is most often the
case, we will host the software and perform related services under a managed
services agreement.

Sales of our solutions under the license-hosted model typically include a
software license fee, an implementation fee, a software maintenance fee, a
managed service fee and, in many cases, variable monthly fees. We establish
vendor specific objective evidence, or VSOE, of fair value for the software
maintenance fee and managed service fee elements of a contract based on the
following two considerations: 1) they are sold independently of the other
elements in a contract, and independently of each other; and 2) these services
generally are, and have historically been, renewed in subsequent years
(independent of the other elements) at the same fees, or the current market
value of those fees, charged when all elements are sold together. Therefore, the
VSOE of fair value for each of such services can be properly determined by
reference to the applicable clients' contractual fee rates relating to those
services.

We are not, however, currently able to establish VSOE of fair value for the
software license and implementation fee elements of our contracts. Therefore, we
use the residual value method to recognize revenue in accordance with SOP 97-2.
Using this method, revenue from the managed service and software maintenance
elements of a contract is recognized ratably over the term of the managed
service arrangement and the software maintenance arrangement, respectively.
Because we are currently unable to establish VSOE of fair value for the software
license fee and implementation fee components of a contract and our installation
services are essential to the functionality of the software, we apply contract
accounting to both the software and implementation elements of the arrangement
in accordance with ARB No. 45 and SOP 81-1. Accordingly, license and
implementation revenues are recognized on a percentage of completion basis.

In the future, if we are able to establish VSOE of fair value for the software
license and implementation elements of our solutions, license fees will
generally be recognized at the time of contract signing, assuming all revenue
recognition criteria are met, instead of on a percentage of completion basis.

                                       17
<PAGE>

As changes occur in our estimate of completion percentage, revenue recognition
is adjusted accordingly. Our estimate of completion percentage is based on the
ratio of the actual effort spent on a project as of the financial statement date
to the estimate of total effort to complete the implementation. Fluctuations in
the estimate of total effort to complete an implementation can significantly
impact revenue recognition on a project in a given period. The estimate of total
effort to complete an implementation involves significant judgment regarding the
time required to perform the tasks associated with a project, such as coding and
testing the solution. In many cases, our estimates are based on past experience;
however, because certain of our solutions are in an early stage of development
and in most cases involve client-specific configuration and/or customization, we
may not always have direct past experience to draw from, which could result in
material changes in the estimate of effort to complete an implementation. In
addition, implementing our solutions generally involves a high degree of
interaction with our clients; therefore, the level of client personnel's
technical understanding and changes in a client's requirements or expectations
can also affect the estimate of effort to implement a solution. However, we
believe our prior experience in developing and implementing complex solutions
provides an appropriate basis for developing our estimates.

If, for any solution implementation, we determine that we are unable to estimate
the effort to implement a solution with a high degree of certainty we defer
recognition of the revenue and related cost until project completion in
accordance with SOP 81-1. Losses are recognized immediately if projected direct
implementation costs exceed anticipated implementation revenues. During the
three and six months ended June 30, 2005, we recognized $55,000 and $125,000,
respectively, in estimated implementation losses related to projects for which
direct implementation costs are projected to exceed implementation fee revenue.
Revenue from variable monthly fees is recognized as services are performed.

We have historically sold our solutions primarily through direct sales efforts
and reseller channels. When we sell solutions through a reseller channel we
recognize revenue consistent with the methods described above.

Technical Personnel Cost Allocation
-----------------------------------

Certain members of our technical staff have the necessary skills to contribute
in solution implementation and maintenance roles, as well as in product
development roles. As such, we distribute our technical resources among these
efforts based on the needs of the organization at a given time. The costs
associated with these employees are allocated either to the cost of revenues or
product development based on the estimate of hours devoted to each such category
in a given period. The estimate of hours by category is derived from the data
maintained in our time tracking system, which reflects the time charged by each
employee to a particular project. For certain projects and ongoing system
maintenance efforts, we must use judgment in designating the effort as either a
cost of revenues or a product development expense. A misclassification in this
regard could result in a significant impact to our gross margin; however, we
believe we apply the necessary diligence in the process of designating projects
to provide a reasonable basis for our estimates.


                                       18
<PAGE>

The following table summarizes the distribution of our employees on a
full-time-equivalent basis as of June 30, 2005 and June 30, 2004:

                                               June 30, 2005       June 30, 2004
                                               -------------       -------------
Staff related to the Cost of Revenues               57                   56
Selling and Marketing                                3                   10
Product Development                                  5                    6
General and Administrative                           8                   11
                                                   ----                 ----
   Total Employees                                  73                   83

Included in the table above are 65 full-time employees and 8 full-time
equivalent part-time employees at June 30, 2005, and 74 full-time employees and
9 full-time equivalent temporary and part-time employees at June 30, 2004.

Results of Operations

The following table summarizes the Company's results of operations for the
periods indicated ($ amounts in thousands):

                                 Three Months Ended June 30,
                                      2005        2004     Change      % Change
                                     -------    -------    -------     --------
REVENUES:

Software license fees                $     4    $    21    $   (17)        (81%)
Implementation fees                      437        379         58          15%
Monthly service fees & software
   maintenance fees                    1,711      2,403       (692)        (29%)
Other fees                                18         19         (1)         (5%)
                                     -------    -------    -------
       Total revenues                  2,170      2,822       (652)        (23%)

COST OF REVENUES                       1,263      1,368       (105)         (8%)
                                     -------    -------    -------

GROSS MARGIN                             907      1,454       (547)        (38%)

OPERATING EXPENSES:
Selling and marketing                    232        538       (306)        (57%)
Product development                      176        186        (10)         (5%)
General and administrative               539        636        (97)        (15%)
                                     -------    -------    -------
       Total operating expenses          947      1,360       (413)        (30%)
                                     -------    -------    -------

INCOME (LOSS) FROM OPERATIONS            (40)        94       (134)       (143%)

OTHER INCOME (EXPENSE):
Interest income                           18          6         12         200%
Interest expense                          (1)        (2)         1          50%
                                     -------    -------    -------
       Total other income                 17          4         13         325%
                                     -------    -------    -------

NET INCOME (LOSS)                    $   (23)   $    98    $  (121)       (123%)
                                     =======    =======    =======


                                       19
<PAGE>

Comparison of the Three Months Ended June 30, 2005 with the Three Months Ended
June 30, 2004.

Revenues: Our revenues consist primarily of implementation fees, software
license fees and monthly service fees from new and existing clients. Total
revenues decreased by $652,000 or 23%, to $2,170,000 for the three months ended
June 30, 2005, from $2,822,000 for the three months ended June 30, 2004.

Monthly Service Fees and Software Maintenance Fees - Monthly service fees and
software maintenance fees were $1,711,000 during the second quarter of 2005, a
decrease of $692,000, or 29%, from $2,403,000 in the second quarter of 2004. The
decrease is primarily due to a $666,000 reduction in service fees related to the
Channel Insight contract with our largest client. In the second quarter of 2005
we reached an agreement with this client to extend many of the services
associated with this contract through October 31, 2005, which included a
reduction in managed service fees of $222,000 per month. Please refer to the
section entitled "Related Business Risks and Assumptions" below in this Item 2
for a discussion of the risk associated with the Channel Insight contract with
our largest client. We also experienced an additional $175,000 reduction in
monthly service fees as a result of other client contract and service
terminations. The decrease in our monthly service fees related to client
contract and service terminations was partially offset by increases in service
fees totaling $149,000 primarily associated with new clients and new service
activations, as well as increases in variable monthly fees as a result of
increased system usage by certain of our clients. The increase in variable
monthly fees is net of a reversal of $104,000 in variable monthly fees that had
been recorded in prior periods, which we now expect will not be collected as a
result of a client contract renegotiation. Accordingly, in the second quarter of
2005 we adjusted revenue to reflect the amount that we believe is collectible.
Monthly service fees and software maintenance fees comprised 79% of total
revenue during the three months ended June 30, 2005, compared to 85% during the
three months ended June 30, 2004.

Implementation Fees - Revenues generated from implementation fees during the
three months ended June 30, 2005 increased by $58,000, or 15%, to $437,000 from
$379,000 during the three months ended June 30, 2004. The increase in
implementation fees is primarily attributable to $134,000 higher revenue as a
result of attaining higher levels of completion percentage on projects that
expand existing client solutions, as well as the implementation of new client
solutions in the second quarter of 2005 compared to the second quarter of 2004.
This increase in implementation fee revenue was partially offset by a $76,000
increase in revenue deferrals associated with an increase in ASP contracts sold
during the second quarter of 2005, which we are required to account for in
accordance with SAB 104, as discussed above. Implementation fees represented
approximately 20% of our total revenue during the second quarter of 2005,
compared to 13% during the second quarter of 2004.

Software License Fees - Software license fees were $4,000 in the second quarter
of 2005, a decrease of $17,000 from the $21,000 of license fees during the
second quarter of 2004. This decrease is primarily attributable to a reduction
in the value of licenses sold. Software license fees represented less than 1% of
total revenue during the three months ended June 30, 2005, compared to 1% of
revenue during the three months ended June 30, 2004. In our contract
negotiations we often times de-emphasize the value of a license in favor of
higher monthly service fees. As a result, our software license fees have
historically represented a small portion of our total revenue and we expect that
this will generally be the case in the future.

                                       20
<PAGE>

Other Fees - Other fees decreased by $1,000, or 5%, to $18,000 during the three
months ended June 30, 2005, from $19,000 during the three months ended June 30,
2004. The decrease in other fees is primarily attributable to a decrease in
travel costs that we incurred on behalf of certain of our clients in the second
quarter of 2004, which we were contractually permitted to pass through to those
clients.

Cost of Revenues: Our cost of revenues includes technical personnel salaries and
related personnel costs, data royalties, depreciation for server equipment,
reimbursable expenses such as telecommunications and contract labor related to
specific projects, co-location facility fees and other direct costs related to
operating our data centers, as well as the recognition of previously deferred
implementation expenses. Cost of revenues was 58% of revenues in the second
quarter of 2005, compared to 48% of revenues in the second quarter of 2004.
Total cost of revenues decreased $105,000 to $1,263,000 during the three months
ended June 30, 2005 from $1,368,000 during the three months ended June 30, 2004.
This was primarily due to a $147,000 reduction in bad debt expense as a result
of reversing bad debt expense in the second quarter of 2005 that had previously
been recorded in prior periods. The bad debt expense recorded in prior periods
related primarily to variable monthly fees that we believed could be
uncollectible as a result of client contract renegotiations. We worked with
these clients during the second quarter of 2005 to resolve the collectibility
issues and now expect that a portion of the previously recorded bad debt amounts
will be collectible. Accordingly, we reversed the previously recorded bad debt
expense associated with these fees. However, we expect that the remaining
portion will not be collectible due to an ongoing client contract renegotiation.
Since we adjusted our revenue to reflect only those fees that we believe are
collectible, as discussed in Monthly Service Fees and Software Maintenance Fees
above, we also reversed the previously recorded bad debt expense related to this
revenue. Also contributing to the decrease in cost of sales was a $42,000
increase in implementation expenses associated with ASP contracts that were
deferred in accordance with SAB 104. We also experienced a $10,000 reduction in
personnel and personnel support costs in the second quarter of 2005 primarily
due to a reduction in the average headcount throughout the second quarter of
2005 compared to the second quarter of 2004. Partially offsetting the reductions
in our cost of sales associated with bad debt expense, deferred implementation
expense, and personnel costs was a $99,000 increase in data center and
telecommunications costs primarily associated with a refund received from a
former data vendor during the second quarter of 2004, as well as the transition
to a new mapping data vendor and increased system usage. The remaining $5,000
decrease in our cost of sales was due to an increase in travel costs that we
incurred on behalf of certain of our clients. As discussed above, the travel
costs incurred for our clients were passed through to those clients and are
included in other revenue.

Operating Expenses:
-------------------

Selling and Marketing Expenses - Selling and marketing expenses consist of
sales, pre-sales, marketing and business development personnel costs and related
expenses, travel and entertainment, sales commissions, and advertising and
promotion costs. These costs decreased to 11% of revenues during the three
months ended June 30, 2005 from 19% of revenues during the three months ended
June 30, 2004. The total amount of selling and marketing expenses decreased by
$306,000, or 57%, to $232,000 during the three months ended June 30, 2005 from
$538,000 during the three months ended June 30, 2004. The change is primarily

                                       21
<PAGE>

attributable to a $158,000 decrease in personnel and personnel support costs
mainly due to planned staff reductions and attrition related to our sales and
marketing staff. In addition, commissions decreased $83,000 primarily due to the
reduction in our revenue. We also experienced a $28,000 reduction in our public
relations and advertising and promotion consulting costs, as well as $27,000
lower travel costs as a result of the reduction in our sales and marketing
staff. The remaining $10,000 decrease in our selling and marketing expenses was
primarily due to lower trade show costs.

Product Development Expenses - Product development expenses consist of time
spent on development of our channel visibility and channel management products
that is not specifically associated with a client contract. Product development
expenses are primarily made up of salaries and related costs. For the three
months ended June 30, 2005, product development expenses decreased $10,000, or
5%, to $176,000 from $186,000 for the three months ended June 30, 2004. This
change was primarily due to a reduction in personnel and personnel support costs
as a result of the workforce reduction on February 25, 2005. Product development
expenses represented 8% of revenues during the three months ended June 30, 2005,
compared to 7% of revenues during the three months ended June 30, 2004.

General and Administrative Expenses - General and administrative expenses relate
to the personnel costs of our executive management, finance, investor relations,
human resources and other corporate functions, general expenses such as legal
and accounting fees, insurance and costs related to our facilities. These costs
increased to 25% of revenues for the three months ended June 30, 2005, from 23%
of revenues for the three months ended June 30, 2004. The total amount of
general and administrative costs over the same period decreased $97,000, or 15%,
to $539,000 during the second quarter of 2005 from $636,000 during the second
quarter of 2004. This decrease was primarily attributable to a $98,000 reduction
in personnel and personnel support costs associated with the termination of our
former Chief Executive Officer in the first quarter of 2005, as well as other
reductions in our full-time equivalent staffing levels. In addition, investor
relations costs decreased $7,000. We also experienced $6,000 lower facilities
costs primarily due to a reduction in depreciation expense as many of our older
assets are now fully depreciated. The reductions in our general and
administrative expenses associated with personnel costs, investor relations
expenses, and facilities costs were partially offset by a $20,000 increase in
professional fees primarily associated with increased legal and accounting
expenses. The remaining $6,000 decrease in our general and administrative
expenses was primarily due to lower travel and entertainment costs.

In the future, we expect that our head count levels, and related costs, in all
functional areas will change commensurate with our needs as we execute against
our business strategy.

Other Income/Expense: We had net other income of $17,000 during the three months
ended June 30, 2005, compared to net other income of $4,000 for the three months
ended June 30, 2004. The increase of $13,000 is primarily attributable to higher
interest income on cash and cash equivalents resulting from higher interest
rates during the second quarter of 2005 relative to the second quarter of 2004.
In addition, we experienced lower interest expense due to a reduction in our
capital lease obligations.

Net Income/Loss: Net loss for the three months ended June 30, 2005 was $23,000
compared to net income of $98,000 for the three months ended June 30, 2004, a
$121,000 decrease. This decrease is primarily attributable to a $652,000, or
23%, decrease in total revenues, which was partially offset by a $518,000, or
19%, decrease in total expenses and a $13,000 increase in other income for the
three months ended June 30, 2005, compared to the three months ended June 30,
2004, as discussed above in this Item 2.

                                       22
<PAGE>

The following table summarizes the Company's results of operations for the
periods indicated (amounts in thousands):

                                   Six Months Ended June 30,
                                       2005        2004     Change     % Change
                                      -------    -------    -------    --------

REVENUES:

Software license fees                 $    27    $   139    $  (112)       (81%)
Implementation fees                       938        947         (9)        (1%)
Monthly service fees & software
   maintenance fees                     3,435      4,698     (1,263)       (27%)
Other fees                                 42         37          5         14%
                                      -------    -------    -------
       Total revenues                   4,442      5,821     (1,379)       (24%)

COST OF REVENUES                        2,996      2,683        313         12%
                                      -------    -------    -------

GROSS MARGIN                            1,446      3,138     (1,692)       (54%)

OPERATING EXPENSES:
Selling and marketing                     635      1,125       (490)       (44%)
Product development                       375        444        (69)       (16%)
General and administrative              1,598      1,363        235         17%
                                      -------    -------    -------
       Total operating expenses         2,608      2,932       (324)       (11%)
                                      -------    -------    -------

INCOME (LOSS) FROM OPERATIONS          (1,162)       206     (1,368)      (664%)

OTHER INCOME (EXPENSE):
Interest income                            33         11         22        200%
Interest expense                           (3)        (5)         2         40%
                                      -------    -------    -------
       Total other income (expense)        30          6         24        400%
                                      -------    -------    -------

NET INCOME (LOSS)                     $(1,132)   $   212    $(1,344)      (634%)
                                      =======    =======    =======


Comparison of the Six Months Ended June 30, 2005 with the Six Months Ended June
30, 2004.

Revenues: Total revenues decreased by $1,379,000 or 24%, to $4,442,000 for the
six months ended June 30, 2005, from $5,821,000 for the six months ended June
30, 2004.

Monthly Service Fees and Software Maintenance Fees - Monthly service fees and
software maintenance fees were $3,435,000 during the six months ended June 30,
2005, a decrease of $1,263,000, or 27%, from $4,698,000 during the six months
ended June 30, 2004. The decrease is primarily due to a $1,332,000 reduction in
service fees related to the Channel Insight contract with our largest client. We
also experienced an additional $338,000 reduction in monthly service fees as a
result of other client contract and service terminations. The decrease in our
monthly service fees related to client contract and service terminations was

                                       23
<PAGE>

partially offset by increases in service fees totaling $407,000 primarily
associated with new clients and new service activations, as well as increases in
variable monthly fees as a result of increased system usage by certain of our
clients. Monthly service fees and software maintenance fees comprised 77% of
total revenue during the six months ended June 30, 2005, compared to 81% during
the six months ended June 30, 2004.

Implementation Fees - Revenues generated from implementation fees during the six
months ended June 30, 2005 decreased by $9,000, or 1%, to $938,000 from $947,000
during the six months ended June 30, 2004. The decrease in implementation fees
is primarily attributable to a $96,000 increase in revenue deferrals associated
with an increase in ASP contracts sold during the first half of 2005, which we
are required to account for under SAB 104, as discussed above. This decrease in
revenue was partially offset by an increase of $87,000 due to attaining higher
levels of completion percentage on projects that expand existing client
solutions, as well as the implementation of new client solutions in the first
half of 2005 compared to the first half of 2004. Implementation fees represented
approximately 21% of our total revenue during the six months ended June 30,
2005, compared to 16% during the six months ended June 30, 2004.

Software License Fees - Software license fees were $27,000 in the first half of
2005, a decrease of $112,000, or 81%, from the $139,000 of license fees during
the first half of 2004. This decrease in license fees is primarily attributable
to a reduction in the value of licenses sold during the six months ended June
30, 3005 compared to the six months ended June 30, 2004. Software license fees
represented approximately 1% of total revenue during the six months ended June
30, 2005, compared to 2% of revenue during the six months ended June 30, 2004.

Other Fees - Other fees increased by $5,000, or 14%, to $42,000 during the six
months ended June 30, 2005, from $37,000 during the six months ended June 30,
2004. The increase in other fees is primarily attributable to an increase in
travel costs that we incurred on behalf of certain of our clients, which we were
contractually permitted to pass through to those clients.

Cost of Revenues: Cost of revenues was 67% of revenues in the first half of 2005
compared to 46% for the first half of 2004. Total cost of revenues increased
$313,000 to $2,996,000 during the six months ended June 30, 2005 from $2,683,000
during the six months ended June 30, 2004. This was primarily due to a $225,000
increase in personnel and personnel support costs as our head count levels were
higher on average during the first half of 2005 compared to the first half of
2004. In addition, data center and telecommunications costs increased by
$148,000 primarily due to a refund received from a former data vendor during the
second quarter of 2004, as well as the transition to a new mapping data vendor
and increased system usage. We also experienced a $5,000 increase in travel
costs that we incurred on behalf of certain of our clients. As discussed above,
the travel costs incurred for our clients were passed through to those clients
and are included in other revenue. The increases in our cost of sales related to
personnel costs, data center and telecommunications expenses, and travel costs
were partially offset by a $36,000 increase in implementation expenses
associated with ASP contracts that were deferred in accordance with SAB 104. We
also experienced a $29,000 decrease in bad debt expense primarily due to the
reversal in the second quarter of 2005 of bad debt that had been recorded in
prior periods, as discussed above.

Operating Expenses:
-------------------

Selling and Marketing Expenses - Selling and marketing expenses decreased to 14%
of revenues during the six months ended June 30, 2005 from 19% of revenues
during the six months ended June 30, 2004. The total amount of selling and
marketing expenses decreased by $490,000, or 44%, to $635,000 during the six

                                       24
<PAGE>

months ended June 30, 2005 from $1,125,000 during the six months ended June 30,
2004. The change is primarily attributable to a $239,000 decrease in personnel
and personnel support costs mainly as a result of planned staff reductions and
attrition related to our sales and marketing staff. We also experienced a
$166,000 decrease in commission expense as a result of the reduction in our
revenue. In addition, public relations and advertising and promotion consulting
costs decreased by $38,000 and travel costs declined by $36,000 due to the
reduction in our sales and marketing staff. The remaining $11,000 decrease in
our sales and marketing costs was primarily due to lower trade show expenses.

Product Development Expenses - For the six months ended June 30, 2005, product
development expenses decreased $69,000, or 16%, to $375,000 from $444,000 for
the six months ended June 30, 2004. This change was primarily due to a reduction
in personnel and personnel support costs as a result of allocating more of our
existing resources to support implementation efforts, as well as the workforce
reduction on February 25, 2005. Product development expenses represented 8% of
revenues during the six months ended June 30, 2005 and 2004.

General and Administrative Expenses - General and administrative expenses were
36% of revenues for the six months ended June 30, 2005, compared to 23% of
revenues for the six months ended June 30, 2004. The total amount of general and
administrative costs increased $235,000, or 17%, to $1,598,000 during the first
half of 2005 from $1,363,000 during the first half of 2004. The increase was
primarily attributable to a $244,000 increase in personnel and personnel support
costs mainly as a result of severance expenses incurred in conjunction with the
separation agreement we entered into with our former Chief Executive Officer
during the first quarter of 2005. In addition, professional fees increased
$31,000 mainly due to higher audit and legal fees in the first half of 2005
compared to the first half of 2004. The increases in our general and
administrative expenses associated with personnel costs and professional fees
were partially offset by a $16,000 reduction in investor relations expenses. In
addition, our facilities costs decreased $9,000 mainly due to lower depreciation
expense since many of our older assets are now fully depreciated. The remaining
$15,000 decrease in general and administrative expenses is primarily due to
lower travel and entertainment costs.

Other Income/Expense: We had net other income of $30,000 during the six months
ended June 30, 2005, compared to net other income of $6,000 for the six months
ended June 30, 2004. The increase of $24,000 is primarily attributable to an
increase in interest income on cash and cash equivalents, as well as lower
interest expense due to a reduction in our capital lease obligations.

Income Taxes: InfoNow has paid no income taxes since its inception and has not
recorded a benefit for income taxes due to valuation allowances provided against
net deferred tax assets, which consist primarily of operating loss
carryforwards.

Net Income/Loss: Net loss for the six months ended June 30, 2005 was $1,132,000
compared to net income of $212,000 for the six months ended June 30, 2004, a
$1,344,000 decrease. This decrease is primarily attributable to a $1,379,000, or
24%, decrease in total revenue, which was partially offset by a $24,000 increase
in other income and an $11,000 decrease in total costs during the six months
ended June 30, 2005, compared to the six months ended June 30, 2004, as
discussed above in this Item 2.

                                       25
<PAGE>

Liquidity and Capital Resources

Since our initial public offering, we have financed our operations primarily
through the placements of private equity securities and, to a lesser extent,
through borrowing and equipment leasing arrangements. We have received a total
of approximately $13,800,000 from private offerings and have received an
additional $3,653,000 from the exercise of stock options and warrants since we
began offering our channel management solutions in 1995. We also have a bank
credit facility with both a $1,000,000 revolving line of credit to support our
future operating needs and a $1,000,000 equipment facility to support our future
investing needs. The bank credit facility requires that we meet various
covenants. We have failed to meet certain of the financial covenants in the
past; however, we have obtained waivers for all instances of non-compliance. We
are not permitted to draw on the bank credit facility if we are out of
compliance with any of the covenants. As of the date of this report we are in
compliance with all covenants and we have no outstanding debt under this
facility. The interest rate on the revolving line of credit is the prime rate
plus 1 percent, and the interest rate on the equipment facility is the U.S.
Treasury note yield to maturity for a term equal to 36 months as quoted in the
Wall Street Journal plus 587 basis points.

We had cash and cash equivalents of $3,363,000 at June 30, 2005, compared to
$4,216,000 at June 30, 2004. Our total cash use for the six months ended June
30, 2005 was $401,000 compared to $917,000 in cash generated during the six
months ended June 30, 2004. The decrease of $1,318,000 was primarily due to a
$983,000 decrease in cash flows from our operating activities, which was caused
primarily by our net loss in the first half of 2005. In addition, cash flows
from our financing activities decreased $440,000 primarily as a result of a
decrease in proceeds from stock option exercises in the first half of 2005
relative to the first half of 2004. The decreases in our cash flow associated
with our operating and financing activities were partially offset by a $105,000
reduction in cash used in investing activities mainly due to a reduction in the
purchase of property and equipment for our data centers and corporate office.
The changes in our total cash flow for the first half of 2005 compared to the
first half of 2004 are discussed below in more detail.

Net cash used by operating activities during the six months ended June 30, 2005
was $322,000, compared to $661,000 of cash generated by operating activities
during the six months ended June 30, 2004. The decrease of $983,000 was
primarily due to the $1,344,000 increase in our net loss. Changes in the
adjustments to reconcile net income to net cash provided by operating activities
are as follows:

     o    $57,000 reduction in depreciation and amortization since many of our
          data center and corporate office assets have become fully depreciated
          without corresponding asset purchases;
     o    $22,000 decrease in the allowance for bad debt primarily due to
          reversing bad debt during the second quarter of 2005 that had been
          recorded in prior periods;
     o    $13,000 decrease in accounts payable primarily due to payments made
          against our accrued liabilities during the first half of 2005;
     o    $6,000 increase in other assets and deferred charges mainly due to
          prepaid insurance payments and increases in deferred implementation
          expenses;
     o    $320,000 increase in deferred revenue primarily due to cash received
          from clients who prepaid their annual service fees in accordance with
          their contract terms, as well as unearned revenue related to solutions
          sold during 2005 for which implementation has not yet been completed;

                                       26
<PAGE>

     o    $76,000 increase in payroll related and other liabilities primarily
          due to an accrual for the cost we incurred in conjunction with the
          separation agreement we entered into with our former Chief Executive
          Officer during the first quarter of 2005;
     o    $62,000 increase in accounts receivable mainly due to an increase in
          unbilled revenues associated with one client's variable monthly fees;
          and
     o    $1,000 increase in the loss on asset disposition in the first quarter
          of 2005.

Cash used in investing activities decreased to $52,000 for the six months ended
June 30, 2005 compared to $157,000 for the six months ended June 30, 2004. The
change of $105,000 is due to a decrease in purchases of computer hardware and
software for our data centers and corporate office. We have plans to increase
our capital expenditures throughout the remainder of 2005 primarily to support
the development of an enhanced version of our Channel Insight solution, to
upgrade or replace some of our existing data center hardware and software, and
to add new equipment to support anticipated growth in our client base.

Net cash used in financing activities during the second quarter of 2005 was
$27,000, compared to cash generated by financing activities of $413,000 during
the second quarter of 2004. The decrease of $440,000 was caused by a $437,000
decrease in cash received from stock option exercises and a $3,000 increase in
capital lease payments.

Variation in the timing of our cash receipts and disbursements can significantly
impact our overall cash flow for a given period and there can be no assurance
that our current cash balance will be sufficient to fund operations.

If we believe it is advisable, we may seek additional funding to continue our
operations. Our ability to successfully complete an offering to obtain
additional funding is dependent on a number of factors. There can be no
assurances that we can successfully complete an equity or debt placement, or
that a placement can be concluded on the terms and conditions that would be
acceptable to us.

The following table summarizes the Company's contractual payments and
obligations by period (amounts in thousands):


Contractual Obligations                         Payment Due by Period
                                      Total   Less Than  1-3     4 - 5   After 5
                                               1 year    years   years    years
                                      ------   ------   ------   ------   ------
Capital Lease Obligations             $   19   $   19   $ --     $ --     $ --
Operating Leases                       1,108      489      619     --       --
Minimum Royalties                        135       12       24       24       75
                                      ------   ------   ------   ------   ------
Total Contractual Cash Obligation     $1,262   $  520   $  643   $   24   $   75


We lease approximately 27,000 square feet of office space at a rate of $17.00
per square foot through September 2005. The rate increases to $18.00 per square
foot from October 2005 through September 2007, when the lease expires.

                                       27
<PAGE>

Recent Accounting Pronouncements
--------------------------------

In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which
will be effective for our fiscal year beginning January 1, 2006. We believe the
adoption of this standard could have a material impact on our financial position
and results of operations.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets,
which will be effective for fiscal periods beginning after June 15, 2005. We do
not believe the adoption of this standard will have a material impact on our
financial position or results of operations.

In May 2005, the FASB issued SFAS No. 154, Accounting for Changes and Error
Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3,
which will be effective for fiscal periods beginning after December 31, 2005. We
do not believe the adoption of this standard will have a material impact on our
financial position or results of operations.

For a more complete description of these accounting pronouncements, please refer
to Note 1 to the accompanying financial statements.

Related Business Risks and Assumptions
--------------------------------------

Our actual results may vary materially from the forward-looking statements made
above, which have been made pursuant to the Private Securities Litigation Reform
Act of 1995. We intend that such statements be subject to the safe harbor
provisions of the Securities Act of 1933 and the Securities Exchange Act of
1934. Our forward-looking statements include the plans and objectives of
management for future operations and relate to a variety of factors, including
management's assumptions about our ability to:

     o    Gain market acceptance of our services;
     o    Retain existing clients, none of whom are obligated to renew, modify
          or extend their contractual relationships with the Company, and
          attract new clients;
     o    Accurately forecast and meet demands for our services, including our
          ability to maintain technical performance of the system as new clients
          are added;
     o    Maintain and improve our network assets as necessary;
     o    Continue to serve new and existing clients;
     o    Improve our operational and financial systems in order to address
          planned growth in our operations;
     o    Develop cost-effective delivery processes for our new solutions;
     o    Maintain or develop adequate pricing and profit margins on our
          products and services;
     o    Retain and attract qualified technical personnel;
     o    Develop future enhancements to our services and control development
          costs of those enhancements;
     o    Operate our business in accordance with our operating budget;
     o    Obtain patent protection for our intellectual property;
     o    Respond to competitive threats, including the possibility of our
          clients migrating to lower cost solutions, such as offshore IT
          development and service functions;
     o    Develop and maintain relationships with strategic selling partners;
     o    Maintain the listing of our common stock on the Nasdaq Stock Market;
          and
     o    Raise additional capital, if needed.

                                       28
<PAGE>

If we are unable to manage the risks enumerated above, or those discussed in our
Annual Report filed with the Securities and Exchange Commission on Form 10-KSB
for the year ended December 31, 2004, our financial condition and results of
operations could be materially adversely affected.

Our assumptions are based on judgments with respect to, among other things,
future economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond our ability to control.

We believe that the assumptions underlying our forward-looking statements are
reasonable. However, our assumptions may prove to be inaccurate and therefore
there can be no assurance that the results contemplated in forward-looking
statements will be realized. You should not regard any statements made in this
report on Form 10-QSB as a representation by InfoNow or any other person that we
will achieve our objectives.

Our common stock is currently listed on the Nasdaq Stock Market. This listing is
dependent on our maintaining certain minimum listing standards, including, among
others, minimum bid price and minimum stockholders' equity standards. On May 5,
2005, we received a notice from Nasdaq indicating we are not in compliance with
the Minimum Bid Price Rule because, for 30 consecutive business days, the bid
price of our common stock closed below the $1.00 minimum per share. In
accordance with the Nasdaq Marketplace Rules, we will be provided 180 calendar
days, or until November 1, 2005, to regain compliance with the Minimum Bid Price
Rule. If at any time before November 1, 2005, the bid price of our common stock
closes at $1.00 per share or more for a minimum of 10 consecutive business days,
Nasdaq will notify us that we have achieved compliance with the Minimum Bid
Price Rule, although the Nasdaq staff has the discretion to require compliance
for a period in excess of 10 consecutive business days, which is generally no
more than 20 consecutive business days, under certain circumstances. As of the
date of this report, the bid price of our common stock remained below the $1.00
minimum per share. If we do not regain compliance with the Minimum Bid Price
Rule by November 1, 2005, Nasdaq will notify us that our common stock will be
delisted from the Nasdaq Stock Market. The notification we received from Nasdaq
on May 5, 2005 has no effect on the listing of our common stock on the Nasdaq
Stock Market at this time and we have not yet determined to take any action in
response to the notice. In addition, based on our current estimated financial
projections, we may not satisfy the $2,500,000 minimum stockholders' equity
balance requirement as of the end of the third quarter of 2005. While we are
evaluating alternatives to remain in compliance with this requirement, there can
be no assurances that we will be able to do so. If our stockholders' equity
balance were to fall below the minimum requirement, we would expect to receive a
deficiency letter from Nasdaq's Listings Qualifications Department indicating we
are out of compliance. If our common stock were to be delisted, trading in our
common stock would then be conducted in the over-the-counter market on the OTC
Bulletin Board.

As of June 30, 2005, approximately $148,000, or 25%, of our total monthly
contracted managed service fees of $589,000 was tied to Channel Insight
contracts with our largest client. These managed service fees expire in October
2005. We are working with this client to negotiate an extension to their Channel
Insight contract at a reduced monthly rate. In addition, we continue to work
with this client for purposes of selling new solutions; however, there can be no
assurance that we will be successful in renewing, extending or expanding
solutions for this client.

                                       29
<PAGE>

For a more comprehensive discussion of the risk factors associated with our
business, please refer to the section entitled "Related Business Risks and
Assumptions" in our Annual Report filed with the Securities and Exchange
Commission on Form 10-KSB for the fiscal year ended December 31, 2004.


Item 3. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed by us in the reports that we file or submit
to the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized and reported within the
time periods specified by the SEC's rules and forms, and that information is
accumulated and communicated to our management, including our principal
executive and principal financial officers (whom we refer to in this periodic
report as our Certifying Officers), as appropriate to allow timely decisions
regarding required disclosure. Our management evaluated, with the participation
of our Certifying Officers, the effectiveness of our disclosure controls and
procedures as of June 30, 2005, pursuant to Rule 13a-15(b) under the Exchange
Act. Based upon that evaluation, our Certifying Officers concluded that, as of
June 30, 2005, our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting that
occurred during our fiscal quarter ended June 30, 2005 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.















                                       30
<PAGE>

                           PART II. OTHER INFORMATION


Item 4. Submission of Matters to a Vote of Securities Holders

     The Company held its annual meeting of stockholders on May 12, 2005. In
     connection with the annual meeting, pursuant to Regulation 14A under the
     Securities Act of 1934, we furnished our stockholders with a definitive
     proxy statement with respect to the matters acted upon. At the meeting,
     four directors were re-elected to their positions to serve until the next
     annual meeting of our stockholders or until their successors are elected
     and have qualified. The following votes were cast with respect to the
     election of directors:

                                                   For              Withheld

     Michael W. Johnson                         8,931,502           581,530
     Duane Wentworth                            9,455,593            57,439
     Jeffrey Peotter                            9,431,183            81,849
     Allan Spies                                9,458,393            54,639



Item 6. Exhibits

     Exhibit Number  Exhibit Description
     --------------  -------------------

     10.1            Amendment to Employment Agreement by and between InfoNow
                     Corporation and Mark W. Geene, dated March 28, 2005.

     31.1            Rule 13a-14(a)/15d-14(a) certification of Principal
                     Executive Officer.

     31.2            Rule 13a-14(a)/15d-14(a) certification of Principal
                     Financial Officer.

     32              Section 1350 certifications.






                                       31
<PAGE>



                                   SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                            INFONOW CORPORATION



Date:  August 12, 2005                      By: /s/ Harry R. Herbst
                                            ------------------------
                                            Harry R. Herbst, Interim Chief
                                            Executive Officer



Date                 Title                                   Signature
----                 -----                                   ---------



August 12, 2005      Interim Chief Financial Officer         /s/ James L. Medina
                     (Principal Financial and Accounting)    -------------------
                     Officer)                                James L. Medina









                                       32
<PAGE>

                                  EXHIBIT INDEX



Exhibit Number       Exhibit Description
--------------       -------------------

10.1                 Amendment to Employment Agreement by and between InfoNow
                     Corporation and Mark W. Geene, dated March 28, 2005.

31.1                 Rule 13a-14(a)/15d-14(a) certification of Principal
                     Executive Officer.

31.2                 Rule 13a-14(a)/15d-14(a) certification of Principal
                     Financial Officer.

32                   Section 1350 certifications.
























                                       33